ESG Score

ESG score is a quantitative measurement of a company's performance on Environmental, Social, and Governance (ESG)
factors. ESG scores are calculated by ESG research firms and investment managers using various methodologies,
including both quantitative and qualitative analysis of a company's ESG practices. ESG scores are based on a range of
factors, including a company's carbon emissions, employee relations, human rights practices, and governance policies,
among others. ESG scores are used by investors to assess the sustainability of investments and to make investment
decisions based on ESG considerations. ESG scores can also be used by companies to assess their own ESG performance
and to identify areas for improvement. It's worth noting that different ESG research firms may have different
methodologies and criteria for calculating ESG scores, and the scores themselves may vary based on the data available
and the level of subjectivity involved in the scoring process.

What is ESG Index?

ESG (Environmental, Social, and Governance) index is a type of stock index that measures the performance of companies
based on their ESG factors. ESG factors include aspects like a company's impact on the environment, labor practices,
human rights, and corporate governance. The purpose of ESG index is to help investors make informed investment
decisions by evaluating companies not just based on their financial performance but also on their sustainability and
ethical practices. ESG indices have gained popularity in recent years due to increased awareness of ESG issues and the
growing recognition that ESG factors can impact long-term financial performance.
There are several well-known ESG indices such as the MSCI ESG Index, the S&P 500 ESG Index, and the FTSE4Good Index.
Additionally, there are many regional and thematic ESG indices that focus on specific industries or geographic regions.
With the growing interest in sustainable and responsible investing, it is likely that the number of ESG indices will
continue to increase in the future.

The MSCI ESG Index

The MSCI ESG Index is a series of indices created by MSCI Inc. that provide a measure of the performance of companies
with high Environmental, Social, and Governance (ESG) scores. The MSCI ESG Index uses a proprietary ESG evaluation
process to assess companies' ESG practices and performance relative to their industry peers. The MSCI ESG Index is
designed to reflect the performance of companies that are leaders in ESG practices and to serve as a benchmark for
sustainable investment. The MSCI ESG Index is used by a wide range of investors, including asset managers, pension
funds, and other institutional investors, to track the performance of companies with high ESG scores and to make
investment decisions based on ESG considerations.

https://www.setsustainability.com/download/jrytma94loehvsq
The ESG Industry Materiality Map
Industry Specific
Key Issue weights are an important part of the MSCI ESG Ratings model. An evaluation of weight-setting schemes found
that the industry-specific weight-setting methodology used by MSCI ESG Ratings outperformed equal-weighted and
optimized weight-setting methodologies over a 13-year study period. The weights displayed in the ESG Industry
Materiality Map represent the average Key Issue weight for companies in an industry. Key Issue weights are determined
through a combination of two factors: 1) how much each industry contributes to the main externality connected to the
issue as compared to other industries (for instance, how carbon-intensive the industry is relative to other industries) and
2) the time horizon within which the externality may materialize.

Company Specific
The foundation for the ESG Industry Materiality Map is an industry-specific evaluation of key ESG risks and
opportunities. However, the ESG Industry Materiality Map also reflects company-specific nuances that may not be
captured by the industry classification. The lines of business, production processes used, and regions where a company
operates are among the determinants of ESG risk. Rules-based model variants take these nuances into account, meaning
that not all companies in each industry are necessarily rated on all the same highlighted Key Issues. Since the ESG
Industry Materiality Map includes company-specific Key Issues, issues that are only applied to a small proportion of the
industry will appear to have a low "average" weight.

The Dow Jones Sustainability Indices (DJSI)

The Dow Jones Sustainability Indices (DJSI) are a family of best-in-class benchmarks for investors who have recognized
that sustainable business practices are critical to generating long-term shareholder value and who wish to reflect their
sustainability convictions in their investment portfolios. The family was launched in 1999 as the first global sustainability
benchmark and tracks the stock performance of the world's leading companies in terms of economic, environmental and
social criteria.

Created jointly by S&P Dow Jones Indices and SAM, the DJSI combine the experience of an established index provider
with the expertise of a specialist in Sustainable Investing to select the most sustainable companies from across 61
industries. The indices serve as benchmarks for investors who integrate sustainability considerations into their
portfolios, and provide an effective engagement platform for investors who wish to encourage companies to improve
their corporate sustainability practices.

Methodology
The DJSI World applies a transparent, rules-based component selection process based on the companies’ Total
Sustainability Scores resulting from the annual S&P Global Corporate Sustainability Assessment (CSA). Only the top
ranked companies within each industry are selected for inclusion in the Dow Jones Sustainability Index family. No
industries are excluded from this process.

Index family
DJSI World
DJSI North America
DJSI Europe
DJSI Asia Pacific
DJSI Emerging Markets
DJSI Korea
DJSI Australia
DJSI Chile
DJSI MILA Pacific Alliance
https://www.spglobal.com/esg/performance/indices/esg-index-family#overview
The S&P 500 ESG Index is a stock market index created by S&P Dow Jones Indices that measures the performance of
companies in the S&P 500 Index with high Environmental, Social, and Governance (ESG) scores. The S&P 500 ESG Index
is designed to provide investors with a benchmark for sustainable investment and to reflect the performance of
companies that are leaders in ESG practices. The companies in the S&P 500 ESG Index are selected based on a
comprehensive ESG evaluation process that considers a wide range of ESG factors, including a company's carbon
emissions, employee relations, human rights practices, and governance policies, among others. The S&P 500 ESG Index
is used by a wide range of investors, including asset managers, pension funds, and other institutional investors, to track
the performance of companies with high ESG scores and to make investment decisions based on ESG considerations.

Methodology
The key criteria for constituent eligibility and selection in the S&P ESG Index Family are the S&P DJI ESG Scores. The
scores contain a total company-level ESG score for a financial year, comprising individual environmental (E), social (S),
and economic & governance (G) dimension scores, beneath which there are on average 21 industry-specific criteria
scores that can be used as specific ESG signals. The criteria scores are weighted to eliminate biases among different
industries and companies that complete the CSA versus companies that are assessed based on publicly available
information. The methodology of the S&P ESG Index Family is constructed to be simple, with a selection process meant
to keep index’s industry weights in line with S&P broad market indices. The index methodology results in improved
composite ESG scores, and offers improved ESG performance across each industry group.

https://www.spglobal.com/esg/performance/indices/esg-index-family#overview

S&P DJI ESG Scores The S&P DJI ESG Scores are derived from over 22 years of detailed sustainability data from the
industry leading ESG assessment, the S&P Global Corporate Sustainability Assessment (CSA). The CSA is an annual
evaluation of companies’ sustainability practices. A key feature of the CSA is that, through optional active participation
in the assessment, companies can disclose additional details to our analysts beyond what is publicly available. This
engagement opportunity, coupled with the granularity of the CSA, enables S&P Global to provide a holistic and complete
view of a company’s sustainability profile; differentiating the S&P DJI ESG Scores from other ESG scores that rely solely
on data from public sources. A company’s active participation in the CSA allows S&P Global to collect between 600 and
1,000 data points per company, which feed into the S&P DJI ESG Scores
The CSA and the derived S&P DJI ESG Scores are driven by materiality analyses considering both financial materiality and
how ESG criteria present a significant impact on society or the environment. Material ESG criteria have the potential to
significantly influence an entity's business value drivers, including, for example, business operations, cash flows, legal or
regulatory liabilities and access to capital. Furthermore, ESG criteria have the capability to significantly improve or
undermine an entity’s reputation and relationships with key stakeholders and society, including the environment.
Therefore, companies are assessed according to the sustainability issues that are weighted according to the magnitude
and likelihood of their impact on enterprise value creation and impact on external stakeholders, including the economy,
the environment, and people. Collecting and scoring data according to 1 Bringing ESG Considerations to Equal-Weight
Indices January 2023 Index Education 7 For use with institutions only, not for use with retail investors. these factors
ensures that companies have been measured based on the sustainability issues that are most relevant to them. The
three examples in Exhibit 6 show how weights assigned to issues in different industries can vary greatly.
This ESG scoring approach culminates in a score between 0 and 100, with 100 being the highest possible score.

ESG in Thailand
ESG (Environmental, Social, and Governance) considerations have gained increasing attention in Thailand in recent
years. As awareness of the impact of ESG factors on long-term financial performance grows, more companies and
investors in Thailand are incorporating ESG considerations into their business and investment strategies.
The Stock Exchange of Thailand (SET) has been actively promoting ESG practices among listed companies and has
launched several initiatives to support ESG disclosure and improve ESG performance. The SET50 ESG Index, mentioned
earlier, is one such initiative aimed at promoting sustainable investing in Thailand.
In addition, the Thai government has also taken steps to promote ESG practices in the country. For example, the
government has implemented regulations on environmental protection and has launched sustainability initiatives in
various industries, such as tourism and agriculture.
Overall, ESG considerations are becoming increasingly important in Thailand and the trend is expected to continue as
more companies and investors recognize the long-term benefits of sustainable business practices.

Thailand Sustainability Investment (THSI)

Stocks in the THSI will be selected from listed companies that voluntarily participate in a sustainability assessment
conducted by the Stock Exchange of Thailand. The assessment covers ESG aspects and is reviewed annually to align with
sustainability trends and changes, both globally and domestically.
A company listed in THSI must have a score of at least 50% in each ESG dimension from a sustainability assessment, or
be a registered company selected as a member of the Dow Jones Sustainability Indices (DJSI) and must meet certain
criteria, such as a quality evaluation of corporate governance reporting (CGR), operating performance in terms of net
profit and shareholder equity, responsible management of registered company issues related to ESG, and being a
security that is not marked with a C. The investment team is comprised of experienced corporate governance and
sustainable development professionals and the market institutions act as filters and selectors with transparency.

Nowadays, long-term investment tends to be more focused on sustainable companies. The financial statement
performance and the consideration in environmental, social and governance (ESG) perspective are keys aspects for
analysis. SET has created a Thailand Sustainability Investment (THSI) list since 2015 for using as an alternative
investment in the high performance ESG stocks for investors while, supporting the sustainable Thai companies. SET
defines the sustainable companies as the companies that embrace risk management, supply chain management and
innovations together with responsibility for environmental, social and governance aspects. The purpose of indicating the
price of these sustainable companies that pass the market capital size and liquidity criteria.

Benefits from Sustainability Assessment:

1.Can be used as a tool for improving and developing business activities to cover ESG issues, creating opportunities and
managing risks effectively.
2.Provides recommendations for improving business management to address related ESG concerns.
3.Attracts interest from responsible investors.
4.Encourages other companies to develop sustainable business practices.
Methodology

1.Companies on the THSI are chosen from the selection of listed companies that voluntarily participate in SET’s annual
Sustainability Assessment, and that pass the Eligibility Criteria.
Eligibility Criteria For example: Must not be a company that is in the process of delisting. Must not be a company that
distributes shareholding in a manner where there are fewer than 150 shareholders or total shares of lower than 15% of
paid-up capital. Must not be a company that received a C (Caution) symbol from SET. Must not be a company that SEC
announced irregular securities trading behavior exhibited by its board members or executives.

2.SET will assess a listed company’s sustainability performance in 4 aspects: Eligibility Criteria For example:

The Sustainability Assessment Questionnaire

covers indicators in three dimensions:
1) Economic, including Corporate Governance 2) Environmental 3) Social.
The questionnaire includes both general indicators for all industry groups, and industry-specific indicators, which reflect
the context and material issues of each industry group (i.e., the 8 industry groups classified by SET). SET conducts an
annual review of the indicators in its Sustainability Assessment to ensure that they continue to align with changing
sustainability trends at the international and national levels.
General indicators for all industry groups

Industry-specific indicators for 8 industry groups

https://shorturl.asia/ieYmJ
3.To assess a company’s sustainability performance, SET reviews in-depth information about a company, including its
board meeting reports, working committee minutes, operating processes/procedures, code of conduct, business plans,
and EIA reports, etc., as well as publicly disclosed information, such as those in a company’s annual report, sustainability
report, and website.
4.Results for the sustainability assessment are calculated based on the weight of each criteria – which differs based on
the industry group and its material issues – and on the company’s own level of performance in terms of policy, process,
performance, and disclosure.
5.Listed companies that are selected for inclusion in THSI list must pass the following criteria:
Assessment Criteria
- Receive a score of at least 50% in each dimension (Economic, Environmental, and Social), or
- Be selected as a member of the Dow Jones Sustainability Indices (DJSI) during the assessment year.

There are several interesting companies in Thailand that are making a positive impact on the environment and society
through their Environmental, Social, and Governance (ESG) practices. Here are a few examples:
1. B Grimm Power Public Company Limited: A leading producer of clean energy in Thailand, B Grimm Power is
committed to reducing its carbon footprint and promoting renewable energy.
2. Charoen Pokphand Foods Public Company Limited (CPF): A leading agribusiness company in Thailand, CPF is
committed to sustainable agriculture and the preservation of the environment. The company has implemented
numerous initiatives aimed at reducing waste and improving the livelihoods of farmers.
3. Siam Cement Group (SCG): One of Thailand's largest industrial companies, SCG is committed to sustainability
and has implemented numerous initiatives aimed at reducing its carbon footprint and improving the
environment.
4. PTT Global Chemical Public Company Limited (PTTGC): Thailand's largest chemical company, PTTGC is committed
to sustainability and has implemented several initiatives aimed at reducing its environmental impact, including
reducing its greenhouse gas emissions and improving energy efficiency.

Difference Between MSCI ESG, DJSI, and THIS

MSCI, DJCI, and THSI are all sustainability indexes used to measure the performance of companies with respect to
environmental, social, and governance (ESG) criteria. However, there are some differences between the three indexes:
1. Coverage: MSCI is a global index provider and covers companies from many countries around the world. DJCI,
also known as the Dow Jones Sustainability Index, focuses on companies in developed markets. THSI, on the
other hand, focuses specifically on companies listed on the Stock Exchange of Thailand.
2. Methodology: MSCI and DJCI use similar methodologies to assess companies' ESG performance, while THSI uses
a unique methodology developed by the Stock Exchange of Thailand in collaboration with local stakeholders.
The methodology for THSI considers the specific ESG challenges and opportunities in Thailand and Southeast
Asia.
3. Investment universe: MSCI and DJCI are widely used by global investors, including asset managers and pension
funds. THSI, being a regional index, may have a more limited investment universe, but it provides investors with
a way to access sustainable investment opportunities in Thailand.
4. Components: The components of each index can be different, as the inclusion criteria and weighting
methodologies may vary. As a result, the performance and returns of the indexes may be different.
So, while MSCI ESG Index and DJSI are both global sustainability indices, THSI focuses on companies listed in Thailand,
providing a local benchmark for ESG performance.
the list of Thai registered companies that are members of the latest Dow Jones Sustainability Index (DJSI) (DJSI World
group and DJSI Emerging Markets group) and those invited to participate in the assessment (on the Invited list).

https://www.setsustainability.com/download/e7xhrwlavyk16m2